Payment Options
Resolve Tax Liabilities with IRS
Ronald Cutler, P.A. can provide you with options to resolve the liability in the most economical manner.
Once you have a tax liability with the IRS you have multiple options to resolve that tax liability with the IRS. The options range from paying the IRS tax liability in full to paying nothing at all. The options are as follows:
A. Pay the IRS in full by paying the amount owed in a lump sum.
B. Arranging for a full pay or partial pay installment agreement. Depending upon the amount owed and where you may be in the collection process you can pay the IRS the full amount due or a much lesser amount depending upon financial information your provide the IRS on your ability to pay them. The IRS reviews the number of persons in your household and whether they are your dependents. You are allowed to deduct from your gross income withholding and Social Security taxes which amount results in net income. You then deduct from net income certain living expenses allowed by the IRS resulting in disposable income. Disposable income is a monthly amount the IRS believes you can pay to resolve your tax debt in full or in part.
C. If your disposable income is zero or a negative number the IRS has determined you cannot pay them at all and until your disposable income increases substantially you pay them nothing.
D. Offer the IRS an amount that is less than the IRS says you owe them. The amount of the offer consists of two elements: 1. Your monthly disposable income determined in B. above, and 2. your net worth. Utilizing an IRS formula as to the offer amount, it is possible to pay the IRS substantially less than the amount you actually owe them. Our office has had excellent success in the IRS accepting offers for less than the amount owed. As this requires substantial work to obtain an accepted offer from the IRS additional fees will be required with written approval of the taxpayer.
E. The IRS has ten years to collect a tax from its date of assessment. If the ten years passes without collection, it can no longer collect the tax unless you voluntarily extended the time period for the IRS to collect the tax.
G. The filing of a bankruptcy petition can if certain conditions are met discharge your income tax liability. The rules are complex in determining taxes that can be discharged in bankruptcy to pay.
H. If certain conditions are met the IRS can abate penalties for failure to file and failure.
I. If joint returns have been filed with a spouse and one of the spouses did not earn some of the income taxes, it is possible for that spouse to be consider “innocent” as to the tax liability and not be liable for payment.
